March 27, 2026

In the Loop – March 27, 2026

“In The Loop” is designed to give you a short update reflecting major developments, earnings, and investment trends across some core Equity Income and Growth holdings. All clients should be aware that individual buy/sell recommendations will be conveyed directly to you on an individual basis. Have a great weekend.

Yesterday, we spent the day in Palm Beach listening to presentations from our partners at First Eagle. During the day, we met with portfolio managers for the Global Value Fund and Small Cap Fund and had dinner with the High Yield Municipal Credit team. Many of you are invested in one or all these strategies. The summary of the visit, First Eagle is a research driven firm, and we are very confident in these teams and strategies. We can discuss it in greater detail during your next review.

What’s Driving Markets: The Iran War

Since the onset of the Iran War, we have seen Oil spike over $100 a barrel, gas climb over $4 a gallon, Interest Rates increase due to higher expected inflation, and the three interest rate cuts we thought we were going to get have turned into discussions of a rate hike. All the sudden news has pushed the S&P500 below the 200 Moving Day Average. Four weeks ago, things looked great and now we are sorting through a wall of uncertainty. We believe the President wants an off-ramp as soon as possible. A “Ceasefire.” However, we are unsure of what Iran wants. It may be in Iran’s best interest to attempt to cause disruption longer in order to get a better deal. The Global Intelligence Group we follow is expecting to see 2 to 4 weeks more of fighting to make it highly probable that we can open the Strait (things could happen faster, but consensus seems to be forming around that timeframe given all that we have seen so far). We can only pray that we see a world after all of this where Iran is not plotting for revenge, but rather is part of a much more robust and peaceful Middle East.

Investors are stuck in a difficult spot:

Inflation makes staying on the sidelines costly, especially after strong market gains, yet putting money to work amid rising uncertainty feels equally risky. The challenge is balancing the fear of missing out with the risk of overpaying—leaving many wondering what the right move is. Lately, no matter who is speaking, we are hearing the same thing: We’re not sure how to navigate this moment.

Fear & Greed Index

Information comes at us so fast these days that it forces us all to filter the information through a short-term lens. The speed at which complex economic and fundamental issues are compressed into headlines has distorted our perspectives and is eating away at our long-term thinking. This is a bad recipe for investing. Staying invested has mattered more than getting the timing correct over the decades. In the last two decades alone, every dollar invested in S&P 500 grew more than eightfold. If you missed the 10 best days, and they usually occur when times feel the worst, your return would drop by half. So, what are we going to recommend? It’s easy, Wealth is created by owning assets. Where do we want to focus today? We are seeing opportunities in companies that allow the United States to remain Resilient. Extreme Fear and Volatility create opportunities. Warren Buffet says, “Be Greedy when others are fearful”.

Individual Company Updates

Flowserve Corporation (FLS)

Flowserve continues to demonstrate steady operational execution and improving fundamentals, supported by its positioning in global energy, power, and industrial infrastructure markets. The company delivered solid fourth-quarter and full-year 2025 results, highlighted by revenue of roughly $4.7 billion, expanding margins, and a meaningful earnings beat, with adjusted EPS of $1.11 in the quarter—up significantly year over year. Growth has been driven by strong aftermarket demand and improving bookings, particularly in energy and nuclear-related end markets, where Flowserve is benefiting from increased capital spending and global infrastructure investment. Backlog remains healthy at approximately $2.9 billion, providing visibility into future revenue streams. Looking ahead, management is guiding to 5–7% revenue growth and roughly 13% EPS growth in 2026, supported by margin expansion initiatives and strategic moves such as the acquisition of Trillium’s valve business, which enhances its exposure to high-value power and flow-control markets. Additionally, the company continues to return capital to shareholders, recently increasing its dividend, while maintaining strong cash generation. Overall, Flowserve is emerging as a levered play on global power demand, energy security, and industrial resiliency, with improving earnings quality and growing participation in long-cycle infrastructure themes.

nVent Electric (NVT)

NVT has received positive analyst reaction following its Investor Day, where management outlined an ambitious three-year growth framework driven by portfolio transformation and increasing exposure to data centers and power utilities. The company is targeting organic revenue growth of 10–13%, with acquisitions contributing an additional 3% or more, alongside adjusted EPS growth of 17–20%. Management also expects strong cash generation, with free cash flow conversion near 95%, and plans to expand adjusted operating margins to approximately 22%. Notably, early indicators suggest momentum is building, as first-quarter performance is already tracking ahead of expectations, reinforcing confidence in the company’s strategic positioning and execution trajectory.

We remain focused on navigating market trends and positioning portfolios for long-term growth and resilience.
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Formidable Asset Management (“Massey Romans Capital”) is an investment adviser registered under the Investment Advisers Act of 1940. The information presented in the material is general in nature and is not designed to address your investment objectives, financial situation or particular needs. Prior to making any investment decision, you should assess, or seek advice from a professional regarding whether any particular transaction is relevant or appropriate to your individual circumstances. Although taken from reliable sources, the Firm cannot guarantee the accuracy of the information received from third parties.

The opinions expressed herein are those of the Firm and may not actually come to pass.